ChannelTrends: Is Cash Falling From Your Cloud Business?

With the exception of utility companies and a limited number of monopolies, few businesses are able to turn almost every one of their prospects into paying clients. The optimal business deal is one where both parties get a fair value. Both the buyer and seller should be pleased with the results of the transaction, with no lingering issues that could prevent future sales. Though that scenario may seem straightforward, many companies lose that perspective over time. The sales team may fall into a situation where they “can’t see the forest for the trees,” doing what it takes to close the deal without looking at the long-term implications. Sometimes those transactions work in favor of the client…and sometimes they don’t.


Those uneven exchanges may work favorably for solution providers (or their clients) making traditional projects and product sales, but when they involve recurring revenue, the long-term prospects are unfavorable. Cloud services provide a great example. Margins for these offerings are typically much lower than with conventional software and hardware sales, so providers have to rethink their business model and policies to remain profitable. Of course, recurring payments are a fair exchange, allowing MSPs to improve their monthly cash flow (and their business value).

Help for a Cloud Makeover

Solution providers continue to make the move away from traditional services and product sales, often to counter competitors or at the request of their clients. Despite predictions made several years ago, a majority of VARs did not make a complete transition to managed services. The hybrid model allows solution providers to offer their clients a complete package of hardware, software, manages services and whatever support they need.


IT companies understand the value in controlling the account. Despite many solution providers’ objections to the term “trusted advisor”, they understand it’s in their best interest to support as many of their clients’ needs as possible. In some cases, that level of service requires collaboration with other IT companies. Managing these relationships can be difficult enough, but when you add the challenges of transitioning to a recurring services model, it adds a lot of complexity to the equation.


While that level of change puts a lot of pressure on solution providers, a number of programs and tools are available to help them make the necessary changes. CompTIA created a whole portfolio of cloud and managed services business transformation resources, including a series of channel training workshops.  These one-day live sessions are intended to help solution providers take advantage of particular business opportunities, particularly useful to those facing the challenges from converting to a recurring services model. For example, Cloud Channel Training Workshop attendees will learn how to leverage industry best practices to market and sell cloud solutions, as well as how to build quality long-term customer relationships. These classes will be offered in a number of locations this year, in conjunction with regional and national industry events.

Building a successful cloud business is just one focal point for this series of workshops, with other sessions covering the building of healthcare, managed services, and vertical-specific practices. If you’re interested in learning more (and keeping some of the cash in your cloud business), check out the calendar of upcoming channel training events and register today.

Brian Sherman is founder of Tech Success Communications, specializing in editorial content and consulting for the IT channel. His previous roles include chief editor at Business Solutions magazine and industry alliances director with Autotask. Contact Brian at Bsherman@techsuccesscommunications.com.